• by Michael Shields , May 25, 2004

Two of the biggest magazine publishers, Conde Nast and Time Inc., are challenging the veracity of a magazine planning metric--the average price paid by a magazine subscriber--that has become an increasingly popular way for media buying shops to differentiate the value of a magazine's readers.

Armed with new research indicating that the so-called "average price paid" essentially has no bearing on the quality of magazine subscriber to advertisers, the publishers are pushing agencies to ignore it when making their print planning decisions. So far, agencies are saying "thanks for the additional insights, but we're going to continue factoring circulation data the way we deem fit."

In an unusual move, the two publishing giants joined forces to commission the study, which was conducted by McPheters & Co., a well-regarded magazine research and consulting company that examined the value of price paid and subscription source metrics for magazines. The study, which was presented recently to prominent print buyers, found that what consumers pay for magazines and how they come to subscribe to such magazines have no correlation to their level of involvement with such titles.

The stated objective of the study was to "determine whether or not price and source of subscription affects reader quality." To do so, McPheters created a study group by matching the individual and household subscriber files of Time and Conde Nast with those of 52,000 MRI respondents.

This sample was then divided in two separate ways: by those who had paid less than average price for each magazine and those who paid more, and by those who had subscribed directly from individual publishers against those who subscribed through a third party.

From a demographics perspective, the study found "no substantial differences between those who pay less than average price and those paying average price or more." Similarly, the study saw not discernable difference between those who subscribe direct from each publisher and those who do not.

Perhaps most important to media professionals, the study compared each group using MRI involvement measures such as "average page exposure" and "average rating score." The study found the difference between the groups to be negligible, although scores for those who subscribed through third-party agents were slightly lower than those who ordered directly from the publisher.

Rebecca McPheters, head of McPheters & Co., has long been a detractor of the average-price-paid-metric. A point-of-view document posted on McPheters' Web site illustrates her adamant opposition: "Anyone with even the most basic knowledge of how subscriptions are sold knows that average price paid is not related to involvement. Nor does it tell us who reads the publication, who sees the ads, or whether they respond to advertising," the report says.

That's not necessarily what media planners think. Many work off the assumption that spending a lot of money implies serious reader interest. "The perception has been that if you pay more, therefore you want the magazine more," said one prominent planner who spoke off the record. "It's almost like saying if you pay a higher price for a book that it will be read more closely."

This new push by publishers to downplay circulation-health measurements comes after several years of increased scrutiny toward circulation figures. Several magazines have come under criticism for using bulk circulation tactics and heavily discounted subscriptions.

Despite both studies' findings, most media planners tend to work off the assumption that spending a lot of money implies serious reader interest.

"Most people have a general feeling that if someone has paid a penny for a magazine, it is not going to hold as great an interest," said Neil Ascher, executive vice president, director of communications services at Zenith, who has not yet seen the McPheters & Co. report.

"The perception has been that if you pay more, therefore you want the magazine more," said another prominent planner who spoke off the record. "It's almost like saying if you pay a higher price for a book that it will be read more closely."

It stands to reason that publishers that employ such tactics might have incentive to downplay the average price and subscription source measurements. "Publishers want to get rid of it," said one planner of average price paid.

While the Audit Bureau of Circulation ultimately is responsible for monitoring average price paid and circulation source data, they were not involved with the McPheters study, according to representative Heidi Chen. "Average-price-paid could be on the table for a discussion topic," she said. "There is nothing formally being discussed."

Price Paid Vs. Involvement Indices

Average      Direct   Not Direct  
                          Price      Price          To           To  
                           Paid       Paid   Publisher    Publisher  
Average Page
Exposure        99        100         107           94  
Rating (MRI*)               101         99         103           97  
Interest In Advertising     102         98         105           96

Frequency Of Reading        101        100         103           97  

Source: McPheters & Co.'s Analysis of Subscription Matching for Time Inc. and Advance Publications. *Mediamark Research Inc. magazine audience rating.